Sunday, October 28, 2007

Paul Krugman on Social Security Through Time

Here is Paul Krugman in 1996 on the funding of Social Security and Medicare:

But aren't Social Security and Medicare basically pension funds, in which workers' contributions are invested to provide for their retirement? Hardly. A private pension fund that planned to pay the benefits these programs promise would be accumulating huge reserves. In fact, the so-called ''trust funds'' are making barely any provisions for the future. In another spectacular statistic, Mr. Peterson notes that if Medicare and Social Security had to obey the same rules that apply to private pensions, the reported Federal deficit this year would be not its official $150 billion, but roughly $1.5 trillion.

Paul Krugman today:

Social Security, if you go through the federal government, piece-by-piece, and see which programs are seriously underfunded and which are close to being completely funded, social security is one of the best. It's not for certain that social security has a problem. And it's something that the right has always wanted to kill, not because it doesn't work. But because it does. And Obama to go after this program, at this time, you have to wonder. All of my progressive friends are saying what on earth is going through his mind to raise this issue.

hat tip: Greg Mankiw


Anonymous said...

That Krugman must be a flip flopper! Changing his opinions after a mere 12 years! He must be a democrat.

xtrachromosomeconservative said...

He has indeed changed his opinion which is no crime in and of itself but it would be interesting to know why. Has he decided that GAAP (General Accepted Accounting Procedures) should not apply to federal pensions but only private pension funds? Inquiring minds would like to know.

xtrachromosomeconservative said...

It is interesting too how Krugman has defined going after the program: Lifting the cap on payroll taxes, i.e. providing more revenue, not cutting benefits. This seems like a cocooning effect.